Demand Matching and Site of Care: High-Cost Facilities Do Not Improve Short-term Quality Metrics Following Total Hip and Knee Arthroplasty

With increased emphasis on improving value in total hip arthroplasty (THA) and total knee arthroplasty (TKA) care, concerns exist about whether variability in hospital costs between facilities is justified. The purpose of this study was to compare index facility reimbursement among hospitals and short-term outcomes for patients undergoing primary THA and TKA. We queried a single private insurer's claims data, identifying all patients undergoing THA or TKA from 2015 to 2017 performed by 25 surgeons across 16 hospitals within our institution. Hospitals were divided into high-and low-cost facilities based on mean index reimbursement. We compared comorbidities, episode-of-care costs, and shortterm outcomes between facilities and performed multivariate analyses. Of 2963 procedures, 1305 (44%) were performed at higher-cost hospitals. Higher-cost facilities had higher mean index reimbursement ($40,597 vs $26,781, P<.0001) and higher mean Charlson Comorbidity Index (CCI; 0.32 vs 0.24, P=.0029), but no difference in complications (2.2% vs 1.8%, P=.3955) or readmissions (2.2% vs 1.5%, P=.1490). On multivariate analyses, higher-cost facility increased index reimbursement by $13,780 (95% CI, $13,489-$14,071, P<.0001) and discharge to facility risk (odds ratio [OR], 3.2; 95% CI, 1.9-5.4; P<.0001), but not complication (OR, 1.2; 95% CI, 0.7-2.0; P=.5983) or readmission (OR, 1.5; 95% CI, 0.9-2.6; P=.1474) risks. Shifting 25% of patients with a CCI of 0 from higher-to lower-cost centers would have decreased inpatient facility costs by an estimated $3,582,784. Wide variability exists between hospital facility costs for THA and TKA without differences in short-term outcomes. Demand matching healthier patients to lower-cost facilities may significantly lower the overall procedural costs of THA and TKA.